FFIB Program Finance-Fraud-Insurance-Banking and you…

1. FFIB ProgramFinance-Fraud-Insurance-Bankingand you…

2. Why Are We Here? Teens Between 13 – 18 Spent $155,000,000,000 in 2000. Source: Stages magazine, “Fiscal Fitness for Teens,” Summer 2001 Issue.

3. Your experience is limited. You are a Prime Target for SCHEMES & SCAMS

4. PERSONAL DEBT The average college undergraduate student has $2748 in credit card debt. At 18% interest, and paying $50 per month, it will take 9.5 years to pay this debt off. Source: Stages magazine,”Fiscal Fitness For Teens.” Summer 2001 issue.

5. Your First Car: Have you thought about…. Needs vs. wants New -- Rebates and other incentives; new car warranty Used -- “as is” -Lemon Law (does not apply to used autos) Financing or cash Reputable, licensed dealership Accurate/fair pricing – check book values Insurance costs, maintenance/gasoline costs Can you pay for it ? Live with it ?

6. Buying a Car:How will you pay? • Lot Financing “on the spot” • Bank • Credit Union • Credit Card • Cash? leasing a car is an option

7. Negotiate!!! • Prices • Interest rates • Trade in allowances • Down Payment Signed Contracts are Final!!!

8. Consider the “Real” Car Costs Do you have a trade-in? Is there a lien or outstanding loan on the car? What payment can you live with? What is the interest rate? How many payments? “Out of Pocket” Repair Expenses? What is the cost of the insurance premiums? Don’t forget Other costs such as tag, title, or registration

9. Itemization of Amount Financed Cash Price $5,900.00 Down Pmt -900.00 Unpaid Bal 5,000.00 + Tax + Doc Stamps 18.00 +Tag/Title 35.00 Optional: +Credit Life Ins 107.00 +Add-Ons. 1,000.00 Amt Financed $6,160.00 Amt Financed $6,160.00 Finance Charge 3,141.60 Total of Payments$9,301.60 True Cost of 95 Mustang plus monthly insurance premium

10. RATE / MONTHLY PAYMENT COMPARISONS

11. … best deal • Do not buy on impulse • Take used cars to YOUR mechanic for a look before buying • Don’t believe verbal promises of sales staff • We owe you…Get it in writing!! • Do not sign any papers with blank spaces, not fully completed • Understand the payment schedule • # of payments – is there a balloon note at end? • Ask about any fees you don’t understand • Ask for the opinion of someone you trust • Be ready to “walk away” – the same deal will still be there tomorrow!

13. Automobile Insurance

14. Under state law, if you own a motor vehicle, you must carry Property Damage Liability ( PDL ) and Personal Injury Protection ( PIP )

15. Comp. & Collision Comprehensive Coverage:pays for replacement or repair when damage is caused by fire, theft, windstorm, vandalism, flood, or other non-collision damage. Collision Coverage:pays to repair or replace your automobile when you collide with another vehicle or object, or your vehicle is overturned. Banks and other lending institutions will require comprehensive and collision when a car is financed. Force PlacedInsurance

16. You Pay!!! Insurance Pays TheDeductibleis what will come out of your own pocket, after a crash. Comprehensive & Collision Deductible: $2,000Damage: $1,800 Coverage: $0

17. Full Coverage ? NO SUCH THING !

18. TheDeductibleis what will come out of your own pocket, after a crash. PIP Medical Expenses: $10,000 Deductible: $2,000 You pay the deductible, plus 20% of medical expenses ($2,000) Total You Pay: $4,000

19. Automobile Insurance • Driving history • Type of vehicle you drive • Where you live • Your gender • Your age • Drivers Education • Your grades • How you use your vehicle (work—pizza delivery) RATE FACTORS

20. Automobile Insurance ThePREMIUM is the money you pay to the insurance company. Pay in full – coverage for 6 months Monthly payments Premium Finance Company* TERMS *A high interest rate may make the premium unaffordable.

21. Insurance Quotes for ‘95 Mustang www.YourInsuranceCo.com

22. Remember the 1995 Mustang that cost $5900? What will it really cost? • $9301.60 is the total amount financed • Monthly Car Payment $258.38 • Monthly Insurance Payment: $312 • Total Monthly Cost of Your Car: $570.38 • Total cost: $20,533.68 over 36 months +Don’t forget gas and maintenance!

24. … And then, there was Credit… The reputation for solvency and integrity entitling a person to be trusted in buying or borrowing. An arrangement for deferred payment of a loan or purchase. Loan: A sum of money lent at interest.

25. Credit Sources Banks and Credit Unions are the Best. The interest rates are lower. Finance companies are less desirable.

26. Establishing Your Credit Open your own checking or savings account – before you turn 18. Once you turn 18… • Your first credit card • Rental agreements • Utilities in your name • Cellular phone

27. Interest Rates and Penalties Credit Limits APR – Annual Percentage Rate Annual Membership Fees Over the Limit Fees Monthly Fees Late Payment Fees Any Incentives Secured Credit Cards Pre-paid or “Guaranteed” Credit Cards

28. Credit Card Sense • Pay off the balance as soon as possible. Make payments on time. • Don’t have more than one credit card. Check/verify all charges when you get your monthly statement. Immediately notify the company in writing of any inaccurate information. Save card use for special occasions or emergencies Never let friends borrow your credit card Shred unused credit card offers If your card is lost or stolen ….

29. Understand what you sign/Know Your Rights • ALWAYS read what you are signing • Don’t sign blank contracts • Walk away from sales pressure • GET COPIES of anything you sign, especially contracts and policies • Keep receipts • Get it in writing – verbal agreements are not legally binding Don’t hurry into a deal that you don’t understand Research before you buy and ask questions Take an experienced friend with you

31. Dangerous Waters Auto Insurance CARS Credit Cards

32. AUTOMOBILE FRAUD “Have I got a Package Deal for you!”

33. AGENT & AGENCY FRAUD Pocketing

34. Sept. 29, 1998 Stable Insurance Company AGENT & AGENCY Joe Someone FRAUD The Wrong Way

35. Sept. 29, 1998 Stable Insurance Company AGENT & AGENCY Insurance Company Name FRAUD The Correct Way

36. FRAUD FRAUD Lying can land you in JAIL!!

37. Is This Your Future?